WiP Seminar: Alessio Carrozzo Magli

Abstract

Organized crime and the state have coexisted for almost two centuries: sometimes they “peacefully” collude, some other they fight. By the aid of a game-theoretic framework, I show that criminal organizations attack only if the state starts hampering criminal profitability via asset confiscation, especially after an illegal market boom. Such “war to the State” often ends when harsh “physical repression” (i.e., conviction of mobsters or military intervention) finally begins. Empirical evidence on Italy, Mexico and Colombia supports the theoretical predictions of the model, also showing that the time lag between confiscation and physical repression may be far from negligible.